Healthcare Costs...

One of the major challenges facing American business today are healthcare costs. I am stating the obvious but in an op-ed piece in the WSJ, it is spelled out by the Chairman and CEO of General Motors...

So what are the fundamental challenges facing American manufacturing? One is the spiraling cost of health care in the United States. Last year, GM spent $5.2 billion on health care for its U.S. employees, retirees and dependents--a staggering $1,525 for every car and truck we produced. And the figure is going up again this year. Foreign auto makers have just a fraction of these costs, because they have few, if any, U.S. retirees, and in their home countries their governments fund a much greater portion of employee and retiree health-care costs.

He also goes on to say that people shouldn't blame them for the legacy costs of retiree healthcare but in some ways, we should blame them. These gold-plated retirement healthcare plans costs people nothing for essentially unlimited coverage whereas the fabled overseas healthcare plans rely heavily on rationing of healthcare and restricting pricing. These gold-plated healthcare plans also raised the bar for others trying to attract workers and other costly plans had to be offered that cost American business today. Giving everything away for free, therefore, reduced incentives for individuals to take care of themselves and little incentive for individuals to not see a doctor or get prescribed a medication for every little thing that happens. I know this since everytime one of my children gets sick, my wife shuffles them off to the doctor just to be sure, even if its an untreatable virus, cold or something mundane. She does this since there is no or little cost in doing this. So a rational retiree would and should do the same.

So, you may be asking yourself what the solution should be? Of course many will offer the idea that universal coverage be applied in the US and sometime cite the "successes" in Europe, but these systems are not all that they seem to be when the idea is being sold to Americans. Have a critical look yourself and truly see what these shortcomings are.

My own opinion is that Americans are very imaginative people and we will figure out other solutions than a leadweight central government administered behemoth that will dumbdown innovation, service and productivity to its lowest common denominator, where everyone will get poor and continuously decreasing quality healthcare. Of course, the wealthy will go to private doctors and clinics and the best and brightest will go into that end of the business but most of the best and brightest will probably eschew medicine altogether under that scenario.

So, my solution is that we should allow the market to decide. Here in Hong Kong, despite universal access to cheap healthcare available through the government, private clinics are springing up all over the place to service the minor healthcare needs of the citizenry. No they don't do open heart surgery but they do treat you when you have a common malady.

Something like this may not be possible in the US due to ambulance chasing lawyers and unbelievable greed by litigation lawyers, but fashioning a system where one cannot sue some of these smaller clinics would give people other options. Maybe some of these could be religion based organizations. Just some thoughts.